Corporate Results of over 2500 companies Thursday, October 28, 1999
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Think Tank
This week we focus on a complete analysis of the
diamond industry
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Consensus blues 

 
Good intentions are important but not enough for a meaningful strategy. Thisis clear from the way consensus -- by which Atal Behari Vajpayee swore onassuming office -- has eluded the government in the Lok Sabha. Consider thecontroversial inclusion of Rajiv Gandhi's name in the Bofors chargesheetwhich, predictably, irked the Congress, the AIADMK and TMC; and though otheropposition parties distanced themselves from the Congress's demand fordropping the late Prime Minister's name, they have nevertheless held thatthe government's handling of the case smacked of political bias. Thegovernment held its ground; that showed firmness but its failure to win overthe sections of the opposition which did not fall in line with the Congresscannot be wished away. Or take the straightforward case of the hike in theprice of diesel, forced by the exogenous spurt in the price of crude. Thegovernment was right in refusing a roll-back, but the entire oppositiondecided to put the government on the mat, and staged a walk-out in the LokSabha.

Consensus requires the opposition to play ball, but it is in no mood to meetthe government half-way. Worse, Telugu Desam Party (TDP) and Janata Dal (U),supporters of the government, have warned against a hike in LPG and keroseneprices. This is believed to be on the cards (in consonance with a rise inproduct prices abroad); so the government has been given notice of the siegewithin! The TDP, in power in Andhra Pradesh, is bent on reaching subsidisedLPG to the poor. Thus, the BJP's alliance partners are not pulling togetheron the key issue of curbing the subsidies at the Centre and in the states.

Punjab, where the BJP was put on the retreat in the Lok Sabha elections, andHaryana, where the BJP surged to the fore, are united in their demand for ahike in the minimum support price (MSP) of wheat -- to Rs 800 a quintal. TheCommission on Agricultural Costs and Prices (CACP) wants to maintain the MSPat Rs 550 per quintal; this is already a high price (reached throughsuccessive hikes in excess of those recommended by CACP in the past) atwhich domestic wheat finds no takers at port centres like Mumbai andChennai. To get over this anomaly, an import levy has been recently slappedon wheat brought in from abroad. Obviously, the new price demanded by theproducing states will make wheat unaffordable for vast numbers. Conceding itwill burgeon the budget subsidy on foodgrains.

The political class is too fractured for a consensus. The tensions that havealready surfaced on both sides of the parliamentary divide bode ill forsecond generation reforms. The government must set out its priorities, getits coalition partners to stand firmly by them.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.

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